25.02.2016 — Constitutional Court to Determine If Decreasing Judicial Costs Is Unconstitutional
The Supreme Court has recently clarified a number of moot points regarding the recovery of judicial costs. Among other things, the Supreme Court held that the reasonableness of judicial costs incurred through payment for legal representation cannot be explained by fame and reputation of the lawyer. The Constitutional Court is going to consider a complaint brought by Shell Neft alleging that assessment by Russian courts of feasibility of the choice of legal representative is unconstitutional.
Court practice shows that very often courts disproportionately decrease the amount of recoverable judicial costs. After mitigation of the recoverable judicial costs on successful termination of a tax claim almost by 10 times the lawyers of Shell Neft initiated proceedings in the Constitutional Court to declare that the court rule Article 110(2) of the Arbitrazh Procedure Code is unconstitutional. Article 110(2) says that ‘reasonable costs incurred through legal representation by the winning party shall be recovered from the other party”. Shell Neft alleges that by disproportionately decreasing recoverable judicial costs, Russian courts violate the constitutional principles of legal certainty and the protection of private property, the right to qualified legal representation as well as the right to full recovery of damages.
Shell Neft has invited the Constitutional Court to determine the boundaries of ‘reasonableness’, referring to the fact that ‘reasonable’ does not always mean ‘the cheapest’, and that in case of legal services it is reasonable to hire an experienced legal representative who is the best in his field. The complaint is currently being reviewed by the Secretariat of the Constitutional Court.
24.02.2016 — State Duma to Consider Decriminalisation of Economic Offences
The State Duma is going to consider a draft bill (No. 1001543-6) introducing changes to the Criminal and Administrative Codes, and providing for the decriminalisation of several economic offences. According to the bill, entrepreneurs who are first-time offenders will face a less serious sentence. However, the bill provides for higher administrative fines than the ones currently set forth in the Criminal Code. Entrepreneurs who are repeat offenders may face arrest and imprisonment.
The draft bill was proposed by Alexander Ageev, member of the Russian State Duma. It provides for the decriminalisation of more than 30 economic offences, such as tax avoidance by an individual, or a legal entity, failure to perform the obligations of a tax agent, concealment of funds, or property, of a legal entity, which are used for tax payment purposes. According to Mr Ageev, imposition of administrative rather than criminal liability pursuant to the said bill will incentivise individuals and legal entities to comply with the law, and avoid committing economic offences.
22.02.2016 — Roskomnadzor Clarifies How to Fill in Personal Data Notification Form
The Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor) has approved permanent guidelines on filling in the processing of personal data notification form. Previously legal entities used to rely on temporary guidelines approved by Roskomnadzor on December 30, 2014.
The updated guidelines clarify the procedure whereby legal entities with branch offices shall notify Roskomnadzor of personal data processing, the list of encryption (cryptographic) tools used to process personal data that should be indicated in the notification form, as well as explain how to fill in the field requiring to indicate the data base location. The notification shall be filed with the local department of Roskomnadzor at the company’s place of tax registration.
The approved guidelines are not obligatory, however complying with them will ensure that the submitted form will not be considered incomplete, and Roskomnadzor will not require the provision of additional information.